So what are the goals of supply chain.
Well that’s like asking what are your goals today.
What are the things you must get done work eat drink exercise have fun.
Get that report done by 5:00 p.m. a healthy and productive lifestyle probably requires that you do all
of these things and so many more supply chains also have many things they try to accomplish contribute
Yes cut costs perhaps make great products.
But let’s try and organize the long list of possible goals.
How do we do this.
Well first let’s remember a supply chain is only part of an organization.
And typically the primary goal of these organizations is to produce a profit.
Profit so profit equals revenue minus cost.
Now most folks will say supply chains are all about cutting costs but that doesn’t really make sense
if you don’t buy any inventory if you don’t make anything if you don’t deliver anything.
Your costs are zero.
Do you think you made the company profitable though.
Of course not.
Supply chains that are tasked with only cutting costs will hurt your company.
Modern companies understand that the best supply chains help drive up revenues by making great products.
So let’s review this first goal.
Modern supply chains must be dual contributors to profit drive revenue by making great products or services
they get to the right place at the right time.
But all the while control costs by eliminating waste.
Now let’s get just a bit more specific.
In order to make great products and services we need to define what the customer wants and also define
how we will differentiate ourselves from our competitor.
We can do this by using four categories cost quality speed flexibility take any two competing companies
such as Wal-Mart and Target Toyota Mercedes Domino’s pizza and your favorite pizza restaurant.
In each case they have different goals in these four categories.
Pick any two competing companies.
Go ahead write them down from the perspective of the customer.
Which of these two companies has lower costs which has higher quality which provides faster service
which provides you more options and greater flexibility.
This isn’t an accident.
The best companies understand how important this is when a supply chain understands its goals in the
areas of cost quality speed and flexibility.
The supply chain is better able to make the customer happy and thus contribute to revenue.
And by understanding what is not required the supply chain can eliminate waste and control costs.
So let’s review the second goal.
Modern supply chains must be able to define what the customer desires in terms of cost quality speed
This helps supply chains to understand what the consumer finds valuable and what might be deemed wasteful
as supply chain managers.
We have two sets of bosses the boss and the customer.
What do they expect from the supply chain.
Well customers want value.
Lots of great stuff at the best price possible.
On the other hand bosses expect productivity create lots of great stuff at the lowest possible cost.
That’s the third set of goals.
Create value for the customer but eliminate waste so you can simultaneously drive up productivity.
Those three sets of goals help us connect the organization strategies and desires to what happens in
the supply chain everyday.
But what if we just wanted to focus on the supply chain.
What should a supply chain manager think about everyday.
They need to have three goals.
This means they need to give the customer the cost quality speed and flexibility package that they desire.
Be efficient meaning make the boss happy by doing things without waste.
Eliminate defects wasted time and confusion.
The best supply chain managers anticipate and plan the change before their competitors.
The needs of customers change technology changes new employees and suppliers will be added to your supply
Supply chains are tested under stress so as an exercise let’s think about something we hate waiting
for coffee the grocery checkout the Cable Guy as the customer what do you expect from them in terms
of cost quality speed and flexibility.
You’re the customer you should know that one.
Surprisingly most companies don’t know what you want though.
Second why do you think that sometimes things go wrong for a company.
Is it the other customers in front of you the worker and how they were trained.
Low quality materials.
Perhaps it’s just a bad plan.
In other words what’s causing the problem.
Finally which changes does a company need to incorporate.
Will you want more from them in the future.
Are there new technologies they should consider implementing.
Next time you get poor service.
Don’t get frustrated.
Think like a supply chain manager.
You are a supply chain manager.
No really you are.
If you make something you are managing a supply chain whether you’re making a car or a plane a meal
or a bed a delivery or a cross-country trip.
A business report a computer program or maybe you’re making a movie.
We all make something and if you do it right you’ll make some people happy.
Your boss your kids some friends a customer an audience or maybe the beneficiary of your hard work might
just be you.
But no matter what we make and how we make it.
We’d love to find ways to make it better make it faster with less effort with fewer materials and less
This this is what supply chain managers do.
Companies in all sorts of industries have taken notice.
At first it was the most obvious industries the ones that actually manufacture tangible stuff.
Automotive aerospace electronics clothing and textiles they started taking supply chain management seriously
a long time ago long before anyone decided to call it supply chain management.
From there it took over retail sales.
Ever heard of Walmart Amazon and Home Depot.
Whether or not you like those companies their development and expansion is an outgrowth of buying storing
and moving products in the most efficient ways possible.
The success of these companies is largely due to modern supply chain management but these companies
not only brought all sorts of products to people all over the world.
They also introduced us to the power of supply chain management.
Now executives in nearly every industry have taken notice hypercompetitive industries such as energy
or banking industries under pressure to serve more and more people and still provide them great service
such as health care education and food management.
They are all interested in having employees with supply chain savvy.
It doesn’t end there though humanitarian organizations have realized that acquiring vital life giving
materials and getting them to the victims in need.
It’s a supply chain problem.
And let’s not forget that a supply chain without information can’t make informed decisions without money
can’t buy or make anything without a well-designed product and good marketing may not have customers.
We are all supply chain managers and the world needs us now more than ever.
So let’s bring this back to you.
How can supply chain positively impact your life.
We all have busy lives cluttered with important and not so important things.
Well perhaps thinking like a supply chain manager can help provide some clarity.
Consider your job or maybe just life at home.
What is something important that you do quite often now.
How would you define success.
What is the desired output.
Answering these questions gives a supply chain manager focus.
Second how much time effort and materials are typically required to reach success.
In other words what are your inputs.
This helps supply chain managers look for opportunities to be more efficient.
Finally a supply chain manager prepares for change and stress.
So now you must ask yourself what is likely to happen in the future.
My boss or customer may want more faster my life and job will become busier.
Now ask yourself Am I prepared for those changes.
Supply Chain Management gives us the opportunity to make our lives better.
Ask yourself these questions to help discover ways to make things better with less effort today and into the future.